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025 Economy Previous Year Questions

Economy Previous Year Questions

Q1. Indian Human Development Report does not give for each sample village
(a) Infrastructure and Amenities Index
(b) Education Related Index
(c) Health Related Index
(d) Unemployment Related Index
Ans: (d)

Q2. Consider the following statements :
(1) The state sets broad parameters and goals for the economy.
(2) The targets to be achieved are broadly set by the state.
(3) The plan is made for the specific time period of about 15 years.
Which of the statements given above is/are correct about the Indicative planning?
(a) 1, 2 and 3 (b) 1 and 2
(c) 1 and 3 (d) only 1
Ans: (b)

Q3. Consider the following statements:
1. Inflation benefits the debtors.
2. Inflation benefits the bondholders.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (a)

Q4. Which among the following is the best measure of the performance of the Central government?
(a) Fiscal Deficit
(b) Revenue Deficit
(c) Primary Deficit
(d) Budgetary Deficit
Ans: (c)

Q5. Consider the following statements:
1. The Nominal Effective Exchange Rate (NEER) is defined as a weight average of nominal exchange rates adjusted for home and foreign country relative price differentials.
2. Real Effective Exchange Rate (REER) is the weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (d)

Q6. With reference to Green Climate Fund (GCF), consider the following statements:
1. It was set up by countries who are parties to the United Nations Framework Convention on Climate Change.
2. It was created to support the efforts of developed and developing countries to respond to the challenge of climate change.
Which of the above statements is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (a)

Q7. Consider the following:
1. Currency with the public
2. Demand deposits with banks
3. Time deposits with banks
Which of these are included in Broad Money (M3) in India?
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1, 2 and 3
Ans: (d)

Q8. Which one at the following is responsible for the preparation and presentation of Union Budget to the Parliament?
(a) Department of Revenue
(b) Department of Economic Affairs
(c) Department of Financial Services
(d) Department of Expenditure
Ans: (b)

Q9. Consider the following statements:
I. Economic infrastructure is located within the system of production and distribution. Some of these are the transport system, banking system and power.
II. Social infrastructure contributes to the production process from outside the system. Some examples are education, training, hospitals and housing.
Which statement is correct regarding Infrastructure?
(a) Only I (b) Only II
(c) Both I & II (d) None of these
Ans: (c)

Q10. Consider the following statements:
1. Remittances to India have declined sharply due to the decline in oil prices.
2. India’s export of services has been affected more than the manufactured products in the recent times.
Which of the above statements is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (b)

Q11. Consider the following statements:
1. A higher capital-output ratio indicates efficient use of capital in the economy:
2. A higher Gini coefficient indicates greater inequality.
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2
Ans: (b)

Q12. Which one of the following items is not included in the current account of India’s Balance of Payments?
(a) Short-term commercial borrowings
(b) Non-monetary gold movements
(c) Investment income
(d) Transfer payments
Ans: (b)

Q13. Buyers’ market denotes the place where
(a) The demand exceeds the supply
(b) The supply exceeds the demand
(c) The demand and supply are well balanced
(d) Commodities are available at competitive rates
Ans: (b)

Q14. Match List I with List II and select the correct answer using the codes given below the Lists:
List-I (Term)
A. Fiscal deficit B. Budget deficit
C. Revenue deficit D. Primary deficit List-II (Explanation)
1. Excess of Total Expenditure over Total Receipts
2. Excess of Revenue Expenditure over Revenue Receipts
3. Excess of total Expenditure over Total Receipts less borrowings
4. Excess of Total Expenditure over Total Receipts less borrowings & Interest Payments
Codes :
A B C D
(a) 3 1 2 4
(b) 4 3 2 1
(c) 1 3 2 4
(d) 3 1 4 2
Ans: (a)

Q15. Which are the pre-requisites required by the Indian economy to implement convertibility of rupee on trade account as suggested by the Rangarajan Committee?
1. There should be comfortable foreign exchange resources
2. Low rate of inflation.
3. Mechanism by which the government can pass on the changes in the price of imported goods to the consumers
4. SLR and CRR must be low.
(a) 1 and 2 (b) 1, 2 and 3
(c) 1 and 4 (d) All of the above
Ans: (b)

Q16. Index ‘Residex’ is associated with-
1. Share Prices 2. Mutual Fund Prices
3. Price Inflation Index 4. Land Prices
Choose the right option
(a) 1 only (b) 1 and 2
(c) 3 only (d) 4 only
Ans: (d)

Q17. Consider the following Balance of Payment transactions:
1. Trade in goods
2. Trade in services
3. Investment Income
4. Loans
Which of the transactions given above does/do not belong to the current account?
(a) 1 and 2 only (b) 3 and 4 only
(c) 1, 2 and 3 only (d) 4 only
Ans: (d)

Q18. Which of the following best describes terms of trade?
(a) Terms of Trade (ToT) is defined as the ratio of import prices to export prices.
(b) Terms of Trade (ToT) is defined as the ratio of export prices to import prices.
(c) Terms of Trade (ToT) is the agreement signed as part of free trade regional agreement.
(d) Terms of Trade (ToT) is the agreement signed as part of regional comprehensive economic partnership.
Ans: (b)

Q19. Which one of the following Public Sector Bank’s emblem figures a dog and the words ‘faithful friendly, in it?
(a) Punjab National Bank
(b) Syndicate Bank
(c) Oriental Bank of Commerce
(d) State Bank of India
Ans: (b)

Q20. Which of the following States in India has the highest density of population?
(a) Kerala
(b) Assam
(c) Uttar Pradesh
(d) Bihar
Ans: (d)

Q21. In the context of Indian economy, consider the following pairs :
Term Most appropriate description
1. Melt down Fall in stock prices
2. Recession Fall in growth rate
3. Slow down Fall in GDP
Which of the pairs given above is/are correctly matched?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Ans: (a)

Q22. Choose the correct one from the below expressions
1. Fiscal deficit = Budget deficit – Government’s market borrowing and liabilities
2. Fiscal deficit = Budget deficit + Government’s market borrowing and liabilities
3. Fiscal deficit = Revenue expenditure – Budget receipts
4. Fiscal deficit = Revenue expenditure + Budget receipts
(a) 1 only (b) 2 only
(c) 3 only (d) None of the above
Ans: (b)

Q23. Consider the following:
1. Uneconomic & Fragmented Holdings
2. Inefficient Labor Force
3. No use of HYV seeds
Which among the above is/ are the reasons for low productivity in Indian Agriculture?
(a) Only 1 (b) Only 1 & 2
(c) Only 2 & 3 (d) 1, 2 & 3
Ans: (a)

Q24. Consider the following countries:
1. USA 2. Russia
3. China 4. India
5. Japan
Which of the given above countries signed Multilateral Competent Authorities Agreement (MCAA) for exchange of Country-by-
Country reports between countries?
(a) 1, 2, 4 and 5 only (b) 1, 2, 3 and 5 only
(c) 2, 3, 4 and 5 only (d) 1, 2, 3, 4 and 5
Ans: (c)

Q25. The reserves held by Commercial Banks over and above the statutory minimum, with the RBI are called
(a) Cash reserves
(b) Deposit reserves
(c) Excess reserves
(d) Momentary reserves
Ans: (c)

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